GOLD IN MADAGASCAR

I.SUMMARY

1.1

Very little is known about the potential gold deposits in
Madagascar, but the country's estimated gold production is far from negligible.
It runs to approximately 3-4 t/y and "could easily be doubled"
(Mining Annual Review - 1995, p 149).

This is a large amount considering that all of it presently
comes from "artisan" mining - or very

small syndicates - and mining is largely alluvial. Estimates
of Madagascar's total gold

production since it began late last century is a highly
respectable 70 tonnes.

1.2.

Madagascar's primary gold deposits are thought to be of
mesothermal "lode" quartz-hosted type,

and they are hosted in Proterozoic or, more frequently,
Archean terrains. Lode gold deposits of

this type account for nearly 20% of world deposits, and are
largely responsible for the vigorous

gold development of Australia, Canada, Brazil and Ghana.

There is no evidence in Madagascar of sediment-hosted gold
deposits, pebble-conglomerate

regarding their gold resources) will require their potential
investors to be serious. Given

Madagascar's unquestionable geological potential this is
only fair.

9. CONCLUSIONS AND RECOMMENDATIONS

Australian experience is relevant to Madagascar in many
ways.

Many goldfields which were very productive at the beginning
of the century came to an abrupt halt in the second decade of this century.
Classical example is Charter Tower gold field, the fifth largest in Australia
where not an ounce of gold has been pulled out of the ground since 1917
andonly recently being reinvestigated.
In previous years 6.6 million oz was extracted from high-grade quartz veins
which bear some similarities to most of Madagascar's goldfields. At today's
price this means well in excess of US$ 2 billions. Then the gold price fell 50%
between 1910 and 1920, mining operations were small and inefficient, and labor
became scarce and expensive because of other opportunities.

Some authors (Borg 1995; p 74) have given a good account on
how modern exploration techniques can be applicable to gold exploration and
evaluation situations in a variety of different anomalous environment. Several
relatively inexpensive techniques such as soil, rock and gossan sampling,
detailed exam of old working and known mineralisation have given good results
in almost all cases and particularly for the associations gold-pyrite which is
very common in Madagascar.

In considering gold ventures in Africa the objectives of the
explorer are all important: the five major South-African gold producers, bent
in substituting what are now very deep and costly mines would not seriously
consider a gold resource below 1 million oz gold (or about 30 kgs in situ
resources). So probably will be the view of some of the major Australian mining
houses: BHP,CRA, WMC, etc. On the contrary for some small speculative company
from Perth or Toronto the main consideration would be the
"profitability" of the venture and much smaller resources can be
considered provided the grades are there: this indeed has been the philosophy
in WesternAustralian goldfields for
the last 15 years.

Lastly some medium-sized companies consider their strategic
medium term objective to become a plus 250.000 ounce gold producer through
mining development in Africa (Cowley, 1995; p 146). At this stage of our
knowledge Madagascar offers scope to all these objectives.

The metallic associations of many Madagascar's gold
districts

would make the modern use of soil and rock geochemistry
highly effective, much as it has happened in geologically contiguous Tanzania.

USABLE GARBAGE?

Countries under consideration in Table XX - elaborated
jointly by the private industry and the UN - show various elements of risks for
mining investment. Without examining each item individually for Madagascar
let's consider the most important.

Geological criteria - geological risk.

This brings in what South African geologists operating in
Africa (an ever-growing breed) call geological risk. That is the geological
uncertitude about the environment in which one is operating. With only minimal
government funded geological exploration having taken place since independence
of most African countries this geological risk is large and widening. By and
large the geological and exploration models developed in Australia, North and
South America in the last, say 30 years, have not yet been applied to most of
Africa, Madagascar included. Mineral exploration has been poorly funded since
the 1960's in Madagascar and often directed to energy resources: uranium, oil
and gas, coal. At Government level Madagscar has amost missed out the gold
exploration "boom" of the last 17 years.

This tends to put a gold exploration company in a
"catch 22" situation: for knowing Madagascar's gold potential some
exploration is unquestionably needed, but then one doesn't know if that
exploration (with the inevitable arrangements with the Malagasy authorities
that this entails) is warranted. It is up to any company, in view of its
objectives and exploration philosophy to make this type of decision. In a way
the present report has been made precisely with the view of lessening
geological risk by combining together what is publically known about gold in
Madagascar.

Two considerations are worth keeping in mind:

1) that for the forseeable future the geological risk on
gold exploration in Madagascar is not going to be significantly decreasedand